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| Quebec smelter |
Aluminerie Alouette, partially owned by Rio Tinto, plans to invest C$1.5 billion ($1.1 billion) to modernize its Quebec smelter. This move follows a new electricity agreement with Hydro-Quebec, strengthening the plant’s position amid US aluminum tariffs.
Aluminerie Alouette Strengthens North American Aluminum Supply
Aluminerie Alouette operates the largest aluminum smelter in North America, producing 630,000 metric tons annually and employing around 900 workers. The $1.1 billion investment aims to upgrade production facilities to improve efficiency and competitiveness. The new Hydro-Quebec power deal ensures reliable and cost-effective energy, critical for aluminum smelting.
The investment comes amid growing US tariffs on foreign aluminum imports, currently at 50%, which disrupt supply chains. Canada remains the primary aluminum exporter to the US, which lacks sufficient domestic smelting capacity. Quebec produces 70% of North America’s aluminum, making this investment strategically vital for regional supply stability.
Trade Pressures and Market Impact on Aluminum Industry
US tariffs have pressured aluminum prices and supply, causing concern among users like Constellation Brands, which anticipates $20 million in tariff-related costs. Aluminerie Alouette’s modernization will help mitigate these trade challenges by enhancing production resilience. The smelter’s upgrade also supports local employment and strengthens Quebec’s economy, emphasizing the region’s key role in North American aluminum markets.
ScrapInsight Commentary
Aluminerie Alouette’s substantial investment signals confidence in North America’s aluminum sector despite ongoing US trade barriers. The new electricity deal with Hydro-Quebec will reduce operational costs, enabling the smelter to better compete globally. This move also highlights the importance of securing reliable energy in heavy industry and suggests sustained aluminum supply stability for the US market through Canadian partnerships.
